The latest Industrial Trends Survey, conducted at the end of November into the beginning of December by the CBI, shows that growth in the UK’s manufacturing sector continued to strengthen with order books and output touching an 18-year high for the second consecutive month, according to the latest CBI Industrial Trends Survey.

The survey of nearly 400 manufacturers found that both the size of total order books and the pace of output growth over the past three months were once again the highest recorded since 1995. 35% of firms reported that total order books were above normal in December and 23% said they were below, giving a balance of +12%, the highest balance since February 1995 (+13%)

Export orders also rose considerably, reaching their strongest level for 22 months, with the improvement mainly driven by the chemicals and motor vehicles & transport equipment sectors.

Growth in output volumes over the three months to December remained robust, with another steep rise across most sectors – 14 out of 16 sectors reported growth with motor vehicles & transport equipment the largest contributor.

Firms expect output growth to continue at a firm but somewhat slower pace in the next three months: 35% expect to raise output and 19% expect to reduce output, giving a balance of +16%. Stephen Gifford, CBI director of economics, says: “The manufacturing sector is showing further signs of momentum with nearly all sectors reporting growth for a second month.

“Total order books and output growth have maintained the strong performance from last month, while export orders have also shown an encouraging upturn in fortunes.

“While risks remain in the Eurozone and beyond, this survey provides further evidence that the recovery is becoming more embedded."